The Capital Plan Rule requires BHCs to estimate revenue and expenses over the nine-quarter planning horizon.

Things to Remember

• Financial projections are crucial for banks to plan for their capital requirements and ensure they have enough liquidity to meet their obligations.
• The Federal Reserve's Capital Plan Rule is designed to ensure that large bank holding companies (BHCs) have adequate capital to withstand economic downturns and financial stress.
• Estimating revenue and expenses over a specific time horizon helps banks assess their financial health and make strategic decisions.
• The nine-quarter planning horizon specified by the Federal Reserve allows BHCs to make informed capital planning decisions and demonstrate their ability to maintain capital adequacy.